The Limits of Price Discrimination Bergemann, Dirk; Brooks, Benjamin; Morris, Stephen
The American economic review,
03/2015, Letnik:
105, Številka:
3
Journal Article
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We analyze the welfare consequences of a monopolist having additional information about consumers' tastes, beyond the prior distribution; the additional information can be used to charge different ...prices to different segments of the market, i.e., carry out "third degree price discrimination." We show that the segmentation and pricing induced by the additional information can achieve every combination of consumer and producer surplus such that: (i) consumer surplus is nonnegative, (ii) producer surplus is at least as high as profits under the uniform monopoly price, and (iii) total surplus does not exceed the surplus generated by efficient trade.
We propose a parsimonious model of bilateral trade under asymmetric information to shed light on the prevalence of intermediation chains that stand between buyers and sellers in many decentralized ...markets. Our model features a classic problem in economics where an agent uses his market power to inefficiently screen a privately informed counterparty. Paradoxically, involving moderately informed intermediaries also endowed with market power can improve trade efficiency. Long intermediation chains in which each trader's information set is similar to those of his direct counterparties limit traders' incentives to post prices that reduce trade volume and jeopardize gains to trade.
Smart Contracts and the Coase Conjecture Brzustowski, Thomas; Georgiadis-Harris, Alkis; Szentes, Balázs
The American economic review,
05/2023, Letnik:
113, Številka:
5
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This paper reconsiders the problem of a durable-good monopolist who cannot make intertemporal commitments. The buyer’s valuation is binary and his private information. The seller has access to ...dynamic contracts and, in each period, decides whether to deploy the previous period’s contract or to replace it with a new one. The main result of the paper is that the Coase conjecture fails: the monopo-list’s payoff is bounded away from the low valuation irrespective of the discount factor. (JEL D42, D82, D86, L12)
The Problem of Bigness Lamoreaux, Naomi R.
The Journal of economic perspectives,
07/2019, Letnik:
33, Številka:
3
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This article sets recent expressions of alarm about the monopoly power of technology giants such as Google and Amazon in the long history of Americans' response to big business. I argue that we ...cannot understand that history unless we realize that Americans have always been concerned about the political and economic dangers of bigness, not just the threat of high prices. The problem policymakers faced after the rise of Standard Oil was how to protect society against those dangers without punishing firms that grew large because they were innovative. The antitrust regime put in place in the early twentieth century managed this balancing act by focusing on large firms' conduct toward competitors and banning practices that were anticompetitive or exclusionary. Maintaining this balance was difficult, however, and it gave way over time—first to a preoccupation with market power during the post–World War II period, and then to a fixation on consumer welfare in the late twentieth century. Refocusing policy on large firms' conduct would do much to address current fears about bigness without penalizing firms whose market power comes from innovation.
We investigate whether a market served by a multiproduct monopolistic seller can be segmented in a way that benefits all consumers and the seller. The seller can offer a different product menu in ...each market segment, combining second- and third-degree price discrimination. We show that markets for which profit maximization leads to inefficiency can, generically, be segmented into two market segments in a way that increases the surplus of all consumers weakly and of some consumers and the seller strictly. Our constructive proof is based on deriving implications of binding incentive compatibility constraints when profit maximization implies inefficiency.
Remanufacturing as a Marketing Strategy Atasu, Atalay; Sarvary, Miklos; Van Wassenhove, Luk N
Management science,
10/2008, Letnik:
54, Številka:
10
Journal Article
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The profitability of remanufacturing systems for different cost, technology, and logistics structures has been extensively investigated in the literature. We provide an alternative and somewhat ...complementary approach that considers demand-related issues, such as the existence of green segments, original equipment manufacturer competition, and product life-cycle effects. The profitability of a remanufacturing system strongly depends on these issues as well as on their interactions. For a monopolist, we show that there exist thresholds on the remanufacturing cost savings, the green segment size, market growth rate, and consumer valuations for the remanufactured products, above which remanufacturing is profitable. More important, we show that under competition remanufacturing can become an effective marketing strategy, which allows the manufacturer to defend its market share via price discrimination.
When FinTech Competes for Payment Flows Parlour, Christine A; Rajan, Uday; Zhu, Haoxiang
The Review of financial studies,
11/2022, Letnik:
35, Številka:
11
Journal Article
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Abstract
We study the impact of FinTech competition in payment services when a monopolist bank uses payment data to learn about consumers’ credit quality. Competition from FinTech payment providers ...disrupts this information spillover. The bank’s price for payment services and its loan offers are affected. FinTech competition promotes financial inclusion, may hurt consumers with a strong bank preference, and has an ambiguous effect on the loan market. Both FinTech data sales and consumer data portability increase bank lending, but the effects on consumer welfare are ambiguous. Under mild conditions, consumer welfare is higher under data sales than with data portability.
This paper develops a dynamic model to study a firm's product and process innovation with expected quality effects in a monopoly exhibiting network externality. The significant features of our work ...are: (i) considering the customers' expected quality effects in a monopoly exhibiting network externality; (ii) the demand structure depends on price, product quality, and expected quality; and (iii) discussing a special case where the network size is proportional to the demand. Our results show: (i) there exists a unique saddle-point steady-state equilibrium under monopoly and social planning; (ii) as the forgetting parameter increases, the effort of process innovation is greater than that of product innovation; (iii) the social incentive towards both efforts is always larger than the private (monopolist) incentive; however, when the network size is proportional to demand, the social incentive towards the effort in product innovation (process innovation) is always smaller (larger) than the private (monopolist) incentive; (iv) sensitivity analysis shows that the both efforts and price are more sensitive towards the unit variable strength of network externality than the fixed strength of network externality, while the forgetting parameter has little effect on the both efforts and price; (v) the effort in product (process) innovation is increasing (decreasing) with the proportional coefficient.
The emergence of a collaborative economy has been driven by advances in information technology that allow consumers to borrow and rent goods among peers on a secondary sharing market. In a dynamic ...setting, consumers make intertemporal decisions about purchases and their participation in the sharing market. This study introduces an overlapping-generations model to analyze product pricing and consumer choice with and without a sharing market. The model quantifies the impacts of a peer-to-peer economy on the demand for ownership, the product price, and all participants' payoffs, including consumer surplus, profits, and social welfare. Given consumers that are heterogeneous with respect to their consumption needs and valuations, it illustrates which of them are prone to participate in a sharing economy and whether a retailer (or manufacturer) can benefit from the presence of a secondary exchange. A sharing market tends to increase the price of new products by a "sharing premium," which positively depends on the retailer's commitment ability. The price increment becomes relatively smaller for higher-cost products. Low-cost products and sufficiently impatient consumers together make a peer-to-peer economy unattractive for retailers. For high-cost products, however, the latter stand to gain from the existence of a sharing market. Most important, the introduction of a peer-to-peer economy increases both consumer surplus and social welfare, thus creating an implicit imperative for a social planner to help promote collaborative consumption, for instance, by providing incentives for retailers and manufacturers that tend to offset possible expected negative payoff effects from consumer sharing.
A simple polarization reconfigurable printed monopole antenna is proposed for wireless applications. Conducting strips are used to connect to the ground plane providing the necessary additional modes ...for circular polarization. Linear polarization, right-hand or left-hand circular polarization can be realized using only two PIN diodes, which connect to the ground plane, minimizing their effect on radiation characteristics. The mechanism is described, and key antenna parameters are studied and optimized. The antenna is prototyped and tested for all polarization configurations.
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